SCOTT MACNAB

The Scottish Parliament will undergo a “reboot” in 2016 with new powers over tax and welfare poised to bring about the biggest overhaul in the way Scotland is governed since devolution, Scottish Secretary David Mundell will say today.

The UK cabinet minister will use a keynote speech to hail the changes as “transformational” and urge Scotland’s political parties to set out how they will use the new powers to improve the lives of Scots ahead of the Holyrood election in May.

Labour leader Kezia Dugdale will reaffirm plans to raise taxes for the high earners in a separate address today, as she warns that the enhanced powers coming to Holyrood will “change the political debate in Scotland.”

Ms Dugdale will say the forthcoming Holyrood election in May will mark a “set of choices on taxation” for the first time in Scotland.

Mr Mundell will describe 2016 as “the year of a new Scottish Parliament” as he attempts to set out the scale of the changes in Scotland’s governance during an address in Edinburgh.

“It’s going to be the biggest shift of power in the history of the UK,” a source close to Mr Mundell told The Scotsman last night.

“This is going to be transformational and almost as big a change in the way Scotland is governed as introduction of the Parliament in 1999.”

Mr Mundell’s intervention today marks the start of a public awareness raising drive by the by UK Government.

“The political parties need to start being a but more upfront with the public about the scale of the change, but also what they will do with the new powers – not just in a theoretical sense but what they will do to help people throughout their lives and increase their life changes,” the source added.

The incoming Scottish Government will take control over income tax rates and bands in the next few years under the package of powers being handed to Holyrood as part of the post-referendum Smith Commission package.

This could allow ministers to tax high-earners, which Labour has already pledged to do. Nicola Sturgeon has indicated she could back this, but the Tories are committed to keeping taxes in line with the UK level.

The new welfare powers have been a source of contention with Nationalist’s insisting they don’t go far enough. But Mr Mundell will insist today MSPs will have powers to create programmes which will help some of the “hardest people to reach” to get back into work.

“It will be a very different Parliament with a very different job to do when you compare it to its predecessors,” the source added. “It’s almost like a reboot of Holyrood – or Holyrood 2.0 if you like.”

But a spokesman for the SNP last night said it is a “premature” for Mr Mundell to call on parties how they will use the powers proposed in the Scotland Bill, because final negotiations are still being carried out on the fiscal framework which underpins the financial powers.

“Mr Mundell cannot just sweep these issues under the carpet,” the spokesman said.The Scottish Parliament should not give consent to any further powers being devolved without an agreed fiscal framework that is fair for Scotland.”